Best Preparations of E05 Exam 2022 Insurance Law (M05) Unlimited 52 Questions [Q27-Q46]

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Best Preparations of E05 Exam 2022 Insurance Law (M05) Unlimited 52 Questions

Focus on E05 All-in-One Exam Guide For Quick Preparation.

QUESTION 27
Ambiguous terms in a household insurance contract are generally construed against the

policyholder due to the literal rule.

policyholder due to the noscitur a sociis rule.

insurer due to the contra proferentem rule.

insurer due to the ejusdem generis rule.

QUESTION 28
A household insurance policyholder leaves his home to go to work without setting the burglar alarm. Whilst he was out, his new tumble dryer overheats and causes fire damage to the kitchen. In what circumstances may the insurer legally reject a fire claim?

If there is a subrogation action against the manufacturer of the tumble dryer.

If the policyholder exaggerates the value of the claim.

If there is a breach of a warranty requiring the burglar alarm to be set.

If the tumble dryer is covered by extended warranty insurance.

QUESTION 29
What is the intended purpose of a subrogation waiver clause in an insurance po

The doctrine of subrogation is excluded from the policy.

The insured has a duty to ensure that the insurer’s subrogation rights are maintained.

Cover is suspended whilst the insurer pursues an action for subrogation.

The insurer’s subrogation rights will not be exercised against certain parties associated with the insured.

QUESTION 30
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the main sources of new English Law?

International treaties.

Case law.

Legislation.

Official law reports.

QUESTION 31
Dan made a financial arrangement on behalf of Liz. However, Liz had the arrangement set aside by the court on the basis that she had been unduly influenced by Dan. To establish undue influence, the court must have specifically identified Dan as

a person holding a dominant position over Liz.

Liz’s independent financial adviser.

Liz’s husband.

a person holding a senior position at Liz’s bank.

QUESTION 32
Bill owned a painting which was insured under a policy containing a first refusal clause. The painting was stolen and Bill’s claim was settled, but several months later the painting was recovered by the police. As a consequence, what is Bill’s position under his insurance policy?

Bill may exercise an option to buy the painting back.

Bill must return the claim settlement in exchange for the painting.

Bill must buy the painting back.

Bill may keep the claim settlement and also keep the painting.

QUESTION 33
For this question more than 1 option is correct. You must select all the correct options to gain the mark. In a consumer insurance policy, a warranty can arise as

an express term.

a continuing warranty.

an exception clause.

a basis of the contract clause.

QUESTION 34
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
The Insurance: Conduct of Business sourcebook (ICOBS) rules in respect of claims handling specify that an insurer must

settle a claim promptly once settlement has been agreed.

handle a claims notification within 14 days.

provide reasonable guidance to an insured to help him make a claim.

not unreasonably reject an insured’s claim.

QUESTION 35
The principle of subrogation prevents a policyholder from profiting from

claiming under both his insurance policy and against any negligent third party.

submitting a full claim recovery under more than one insurance policy.

retaining salvaged property.

assigning abandonment rights to the insurer.

QUESTION 36
A property policy contains a condition regarding prompt loss notification. If the insured fails to comply with this condition, in practice, the insurer is likely to

only avoid the claim if the delay has seriously prejudiced its investigation and handling of the claim.

settle the claim and cancel the insurance policy from inception.

avoid the claim automatically due to the breach of the policy condition.

settle the claim and recover its outlay from the insured.

QUESTION 37
In respect of a life assurance policy, the duty to take reasonable care NOT to make a misrepresentation ends when the proposer

assigns the contract to a third party.

dies and his estate submits a claim to the insurer.

forms the contract with the insurer.

signs and submits the completed proposal form to the insurer.

QUESTION 38
For this question more than 1 option is correct. You must select all the correct options to gain the mark. How may double insurance arise?

A deliberate attempt to obtain the proceeds of two policies.

A merger between two major insurance companies.

An overlap in cover between two different types of insurance policy.

The inadvertent non-cancellation of a policy when a new policy is taken out.

QUESTION 39
As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because

the misrepresentation was fraudulent.

the premium was paid by monthly installments.

no claim had been submitted or paid.

the misrepresentation was innocent.

QUESTION 40
At what stage is insurable interest required for a marine cargo insurance policy?

At the time of the loss only.

Throughout the duration of the contract.

At inception of the policy only.

At both inception of the policy and at the time of the loss.

QUESTION 41
What is the most common for of corporation?

Registered corporation.

Chartered corporation.

Corporation sole.

Statutory corporation.

QUESTION 42
According to statute law, an unfair term in a consumer insurance contract is defined as one which

provides insurance where the scope of cover is narrow compared to the premium charged.

causes a significant imbalance in the parties’ rights to the detriment of the consumer.

has been individually negotiated and is to the detriment of either one of the parties.

does not restrict liability for death or personal injury.

QUESTION 43
John owns stock that he intentionally insured for £15,000, although the full value of the stock is £18.000. His insurance policy has no excess and is subject to a pro rata condition of average. In the event of water damaging
£6.000 of John’s stock, how much will the insurer pay for a valid claim after the application of average?

£3,000

£5,000

£6,000

£15,000

QUESTION 44
A breach of warranty under the general law of contract legally entitles an injured party to

claim damages.

avoid the contract from the date of the breach.

obtain specific performance.

avoid the contract ab initio.

QUESTION 45
A riot results in a shop being damaged and the shopowner’s insurer settling the claim. A subrogation right enabling the insurer to sue the police authority arises under

tort.

a condition subsequent to liability.

a condition precedent to liability.

statute.

QUESTION 46
How can an agency relationship be best described?

A person has transferred his obligations under a contract to another party.

A person, who has paid another party under a contract, has the right to stand in the place of that other party and avail himself of the rights and remedies of that party.

A person has the authority to act on behalf of another party.

A person has ratified another party’s action.